The next glut for refiners

Margins will suffer, with refiners about to add even more distillation capacity that the world probably won’t need

Global refining capacity is about to surge, a legacy of decisions made when the oil price was high and demand for products looked rosy. Quite how much more processing the world will have by 2020 is, however, up for debate. The downturn is likely to delay some projects. Even then, the world probably has enough distillation capacity to tide it over for several decades to come. Opec, ever convinced of oil’s relentless growth, says 7.1m barrels per day of new distillation capacity will come on stream in the next five years – most of it to be built in the Middle East, China and the rest of Asia-Pacific.  That equates to around 1m to 1.4m b/d of new capacity each year – a pace of growth that will